Reeder: Expensive litigation hurts business, consumers

RIVERTON – I pulled up to a gas pump earlier this month and noticed a fellow struggling with a gas can.

He gave me an exasperated look and said, “These new cans are almost impossible to use.”

There is no doubt about that. Gas cans are being made with removable funnels instead of spouts. Or if a can does have a spout, it also has some sort of check valve on it that makes it difficult to empty or fill.

But don’t blame the engineers. Blame the trial lawyers.

Litigation has imperiled the domestic safety can industry. In fact, last year, Blitz USA, then the nation’s largest gas-can maker went out of business after spending $30 million defending itself in court and still owed $3 million in lawyer fees at the time of its bankruptcy, according to news reports.

How often do you see a company such as Blitz, with 75 percent of the domestic market, shut its doors?

It wasn’t the vagaries of the marketplace that put the firm out of business, but because of the legal system.

Some products never can be perfectly safe, particularly when people don’t use them wisely.

According to The Wall Street Journal, most of the lawsuits came from folks who tried to pour gasoline onto fires and were burned.

Who speaks for the rest of us who are wise enough not to pour gasoline onto open fires, but are still forced to pay more for products that are harder to use?

The cost of litigation gets passed on in the price of products. For example, I had a 5-gallon steel gasoline can stolen from my garage last month. It cost more than $70 to replace. That’s about $30 more than the stolen one cost.

While Blitz was an Oklahoma company, Illinois businesses are even more vulnerable to lawsuits. In 2012, the U.S. Chamber of Commerce’s Institute for Legal Reform ranked Illinois 46th of the 50 states for its legal fairness.

“This hurts commerce within the state,” he said. “Small businesses don’t have the resources to budget for this type of litigation.”

There are a variety of reasons for why Illinois has a less favorable litigation climate, Akin said.

“Part of it is our political culture,” he said. “Judges here are more likely to be tolerant of frivolous lawsuits and more likely to accept lawsuits from other jurisdictions.”

Certain jurisdictions, such as Madison and Cook counties, are perceived to be desirable locations in which to file lawsuits because judges and juries are viewed as more favorable to plaintiffs.

Ed Murnane, president of the Illinois Civil Justice League, said it is time for lawmakers to restrict this type of “forum shopping” by plaintiffs’ attorneys. Murnane added that the state needs to look for ways to restrict “pain and suffering” judgments.

“If someone is truly hurt and fault is found, they should be compensated for their economic damages – but not for perceived pain and suffering,” he said.

After all, 117 factory workers in Oklahoma are suffering because their plant shut down. And consumers are suffering with harder to use, more expensive products.

Where is our societal concern for those people?

• Scott Reeder is a veteran statehouse reporter and the journalist in residence at the Illinois Policy Institute. He can be reached at sreeder@illinoispolicy.org.